When Will Student Loan Payments Resume?

In less than two months, the US Supreme Court will issue its decision on President Joe Biden's plan to forgive up to $20,000 in student loan debt. How the justices rule will affect 40 million eligible borrowers, including nearly 20 million who would see their entire balance erased.

It will also determine when borrowers have to resume student loan payments and interest, which were suspended at the start of the pandemic in March 2020. Since then, the end of the student loan forbearance has been pushed back eight times by two presidential administrations. 

Read on: The Best Credit Cards for Paying Off Debt

After rolling out its debt forgiveness program in August, the White House announced that loan payments would resume on Jan. 1, 2023. But after challenges to the plan reached the Supreme Court, the pause was extended again to give the high court time to reach a decision.

"It isn't fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit," Biden said in a statement.

Here's what you need to know about federal student loan payments, including when repayments could restart.

For more on saving money, find out about the best credit cardswith 0% APR and why you should lock in a long--term CD.

When do student loan payments resume?

When student loan payments and interest begin again depends on when the Supreme Court issues its ruling on two challenges to President Biden's plan. The court heard opening arguments in both cases on Feb. 28 and must issue its ruling by June 30, when the justices head into summer recess.  

The White House has said payments and interest will resume either 60 days after the Supreme Court makes its ruling or 60 days after June 30, 2023.

Student loan expert Mark Kantrowitz thinks the administration will wait to start the countdown until the first of the month after the Supreme Court ruling. If a decision came down May 25, the 60-day period would start on June 1, according to Kantrowitz, and loan payments would resume on Aug. 1, 2023.

If the court waits until June 30 to issue its ruling, though, the forbearance would presumably end on Sept. 1, 2023. 

It's always possible the moratorium could be extended again, but experts say that would only be a gambit to buy time, not a permanent solution to the student loan crisis. 

There could be a phased restart to loan repayment

Given that millions of Americans haven't made student loan payments in three years, restarting the process all at once could be an administrative nightmare. The White House is reportedly considering a slow rollout or possible extensions. 
According to Politico, some options include holding off on requiring payments until October 2023, to make sure lenders have time to send billing statements and borrowers have time to update banking details, and letting loan servicers write off small student loan balances of up to $100.
There's also been discussion of a grace period of up to a year, during which payments would be due but late fees wouldn't be assessed and accounts wouldn't fall into default.

Which student loans are currently paused?

The Biden program would forgive $10,000 in public student loans for individuals earning less than $125,000 per year, or married couples making less than $250,000 combined. Borrowers paying off federal Pell Grants would be eligible for an additional $10,000 in relief.

The moratorium on payments and interest includes all federally held student loans, regardless of what company is servicing the loan. Eligible student loans include:

• Direct federal student loans
• Federal Family Education Loan program loans held by the Department of Education, aka FFEL
• Federal Perkins Loans held by the Department of Education
• Defaulted FFEL loans not held by the Department of Education
• Defaulted Health Education Assistance loans, aka HEAL

Student loans that are not eligible include:

• Nondefaulted FFEL loans not held by the Department of Education
• Federal Perkins Loans not held by the Department of Education
• Nondefaulted HEAL loans
• Private student loans

If your student loans are eligible, payments and interest were automatically paused on March 13, 2020. If you're not sure whether your loan payments are paused or not, contact your loan servicer.

What are the challenges to the student loan forgiveness plan?

The Justice Department has argued that the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, gives the federal government license "to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies."

But in November 2022, Texas Judge Mark Pittman ruled that the HEROES Act  "does not provide the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program."

The White House appealed, but a federal appeals court issued an injunction during the appeals process.

In a separate case, Republican attorneys generals in six states -- Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina -- claim Biden's plan threatens tax revenues from companies that invest in and service student loans in their states. While that challenge was initially thrown out on the grounds that the states failed to establish legal standing, the plaintiffs appealed all the way to the Supreme Court.